LONDON (Alliance News) - Stock prices in London are set to open in the red on Monday as the latest round of US tariffs on China come into effect, with focus in the UK on Brexit developments following the sour EU meeting in Salzburg last week.In early UK company news,
Randgold Resources has agreed to an all-share merger with Barrick Gold,
Thomas Cook issued a profit warning following the hot summer weather in the UK, and Comcast over the weekend beat out Twenty-First Century Fox to buy
Sky.IG said futures indicate the FTSE 100 index of large-caps to open 31.03 points lower at 7,459.20 on Monday. The FTSE 100 index closed up 1.7%, or 122.91 points, at 7,490.23 on Friday."European markets look set to turn lower at the start of trading on Monday. The new US and Chinese tariffs take effect today so traders in Asia and Europe look cautious," commented Jasper Lawler, head of research at London Capital Group.He added: "The real test will be when the Dow Jones opens this afternoon. US stock market bulls will try to push further into record high territory. It has taken the Dow the best part of eight months to make a record high this year. The risk is that investors who have ridden out eight months of losses at the hopes of getting back to new highs start to book profits."In the US on Friday, Wall Street ended mixed, with the Dow Jones Industrial Average ending up 0.3%, having hit an all-time high of 26,769.19 during the session. The S&P 500 ended flat, however, and the Nasdaq Composite shed 0.5%.In company news, FTSE 100 constituent
Randgold Resources said it has agreed to a merger with Toronto-headquartered peer Barrick Gold Corp in an all-share deal.Under the terms of the merger, each Randgold shareholder will receive 6.1280 Barrick shares and will own around 33.4% of the combined group. Barrick shareholders will own 66.6% of the new entity.The merger is expected to close by the first quarter of 2019, with the enlarged group having a market capitalisation of around USD18.3 billion."Our industry has been criticised for its short-term focus, undisciplined growth and poor returns on invested capital. The merged company will be very different. Its goal will be to deliver sector leading returns, and in order to achieve this, we will need to take a very critical view of our asset base and how we run our business, and be prepared to make tough decisions," said Randgold Chief Executive Mark Bristow.He added: "By employing a strategy similar to the one that proved very successful at Randgold, but on a larger scale, the new Barrick group will leverage some of the world's best mines and talent to create real value for all stakeholders."Shares in the new Barrick group issued to Randgold shareholders will be admitted to trade on the New York Stock Exchange and the Toronto Stock Exchange, with Randgold's London listing to be cancelled.Pharmaceutical firm
AstraZeneca said its type 2 diabetes medication Farxiga achieved positive results in the Phase III Declare-Timi 58 trial, a large cardiovascular outcomes trial in 17,000 patients with type-2 diabetes.Farxiga met the primary composite endpoint of a statistically-significant reduction in hospitalisation for heart failure or cardiovascular death. Fewer major adverse cardiovascular events were observed with Farxiga for the other primary efficacy endpoint, though this did not reach statistical significance.FTSE 250-listed
Thomas Cook said its recent trading performance has been "disappointing" as it guided towards annual underlying earnings before interest and tax of GBP280 million for its year ending September 30. For the company's previous financial year, Thomas Cook delivered underlying Ebit of GBP330 million."Summer 2018 has seen a return to popularity of destinations such as Turkey and Tunisia. However, it has also been marked by a prolonged period of hot weather across Europe. This meant many customers spent June and July enjoying the sunshine at home and put off booking their holidays abroad, leading to even tougher competition and higher than usual levels of discounting in the 'lates' market of August and September," said Chief Executive Peter Fankhauser.Over the summer, total bookings were up 12% but the average selling price down 5%. The hot summer is also continuing to be felt into winter trading, Thomas Cook added.In a separate announcement, the travel operator said Chief Financial Officer Bill Scott has decided to step down and will leave the company on November 30, after the release of the company's annual results.Scott joined Thomas Cook in July 2012, and was only appointed CFO at the start of 2018.Sten Daugaard has been chosen as his replacement on an interim basis, having previously held the CFO role at Lego and SGL Carbon. Thomas Cook said it will commence a search for a long-term CFO with immediate effect.Water firm
Pennon Group said it is on track to meet management forecasts for its current financial year, with cost savings momentum being maintained."We remain confident in the UK residual waste sector fundamentals, with further capacity essential to meet longer-term demand," said Pennon.The company added that its "clear strategy" and strong balance leaves it well-placed.Property developer
Great Portland Estates said it has appointed Richard Mully as non-executive chairman effective February 1, 2019. Mully will succeed Martin Scicluna, who will retire from the board at the end of January. Mully joined the Great Portland board in December 2016.Over the weekend, US cable Comcast emerged victorious in its battle to takeover pay-TV firm
Sky, beating Twenty-First Century Fox with a GBP30 billion bid for the FTSE 100 constituent.In a dramatic end to one of the City's most complex and convoluted takeover sagas in recent memory, Comcast won out in a day-long auction overseen by the UK Takeover Panel on Saturday.Comcast's bid was GBP17.28 per share, beating 21st Century Fox's GBP15.67 per share, after the auction went to the maximum three rounds.Shares in Sky closed at GBP15.85 per share on Friday - the stock already 57% higher in the year-to-date as the Comcast-Fox bidding war unfolded - around 9% lower than Comcast's bid.Sterling was quoted at USD1.3073 early Monday, flat compared to USD1.3072 in London late Friday as the pound tumbled from USD1.3265 at the equities close on Thursday due to 'no-deal' Brexit worries.On Monday, Theresa May is to meet senior ministers as she battles to save her Chequers blueprint for Brexit following last week's humiliating rebuff by EU leaders.The UK prime minister will chair a meeting of the Cabinet in Downing Street on Monday amid intense pressure to change course and seek a simpler, less ambitious deal. There is likely to be a lengthy inquest into what went wrong at last week's informal EU summit in Salzburg where May was bluntly told key elements of the Chequers plan would not work.The prime minister insists her proposal, which would see Britain maintain a "common rulebook" with the EU for trade in goods and agriculture, is the only credible option on the table which would avoid the return of a "hard border" between Northern Ireland and the Republic.But she is facing increasingly vociferous calls from Tory Brexiteers to abandon Chequers in favour of a more basic free trade agreement in goods along the lines agreed between the EU and Canada.This comes after UK Labour Party leader Jeremy Corbyn has said he will back a second Brexit referendum if it is supported by the Labour Party conference.In the economic calendar on Monday is the Ifo survey in Germany at 0900 BST followed by the CBI industrial trends survey in the UK at 1100 BST. In the US is the Chicago Fed national activity index at 1330 BST.The Japanese Nikkei 225 index and the Shanghai Composite in China are both closed on Monday, though the Hang Seng index in Hong Kong is open and is trading 1.5% lower.The largest round of US tariffs on Chinese imports came into effect Monday, with neither side showing any sign of backing down in their escalating trade war.Tariffs initially set at 10% on USD200 billion of Chinese imports into the US came into effect at 12:01 am Washington time.The tariffs will increase to 25% on January 1, US President Donald Trump said last week while announcing his largest strike yet in the trade dispute.Beijing in turn will impose tariffs ranging from 5% to 10%, depending on the product, on USD60 billion worth of US products.
